One of my New Year’s resolutions being to actually look at the newspaper more often, I picked up The Chicago Tribune recently and found one of the cover stories addressing a class topic: ethanol as as alternate fuel source.
According to the article, by reviewing the statistics from 2007 compared to previous years, one can see a clear increase in corn prices due to the “Ethanol Boom.” In 2002, for example, the net income for grain famers stayed around $30,000. In 2007, though, the number hovered around $110,000. (University of Illinois research) If I’ve figured it out correctly, that’s an increase of nearly 73%.
However, this increase indicates high sonsumer prices for basic food items. This year’s greater than 4% increase in food prices compared to the previous 2.4% increase has sparked debate on the overall good of ethanol as an alternative fuel source. According to The Grocery Manufacturers Association, the blame rests mainly on those federal laws which encourage the use of ethanol for fuel. One lobbyist for GMA, Scott Faber, is quoted, “The government has intervened in a way that would make Stalin blush.” As I blogged a little earlier, a new energy bill is in motion, calling for the mixture of motor fuels with 15 gallons of corn-based ethanol by 2015. Many see this bill as an aid to our national security. In the words of Mark W. Leonard of Iowa, quoted in The New York Times, “We need to quit sending money to people who want to blow us up.”
The views from the farmers’ end appear mainly optomistic, suggesting that the improved yield of 160 bushels per acre two years ago compared to the current 200 bushels per acre may ease some of the tension. An Illinois farmer featured in the article (Chicago Tribune), Len Corzine, sees the improving techonolgies as a possible means to lessen the gap created by the demand for ethanol. Still, others argue that this view is a false hope because it means assuming that patterns for supply and demand will stay relatively similar in upcoming years.
Sources:
The Chicago Tribune. “Ethanol Boom a Mixed Bag” by Joshua Boak. (12/26/07)
http://www.nytimes.com/2007/12/18/business/18food.html?pagewanted=1&_r=2&th&emc=th
